HomeBusinessThe BoJ's April underlying inflation measures are all below 2%

The BoJ’s April underlying inflation measures are all below 2%

By Leika Kihara and Takahiko Wada

TOKYO (Reuters) – The Bank of Japan’s key measures of underlying inflation in April all fell below its 2% target for the first time since August 2022, data showed on Tuesday, adding to uncertainty over the timing of the next rate hike increased.

Weighted median inflation, one of three closely watched indicators of whether price increases are broadening, rose 1.1% in April from a year earlier, after rising 1.3% % in March, the data showed.

The trimmed average index, which ignores the top and bottom parts of the price change distribution, rose 1.8% in April from a year earlier, a slowdown from the previous month’s 2.2% , the data showed.

A third index that measures the highest-density inflation rate in the distribution also rose 1.6% in April, slower than the 1.9% increase in the previous month, it showed.

The BOJ in March ended eight years of negative interest rates and other remnants of its radical monetary stimulus, believing that a sustainable achievement of its 2% inflation target was in sight.

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BOJ Governor Kazuo Ueda has said the central bank will raise interest rates from current levels of near zero if underlying inflation accelerates towards 2%, as currently expected.

The data casts doubt on the BOJ’s view that price increases are spreading beyond those driven by rising commodity costs and are likely to be supported by robust domestic demand.

(Reporting by Leika Kihara and Takahiko Wada; Editing by Jacqueline Wong)

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